West Michigan Real Estate Statistics and Trends

From the Grand Rapids Chamber of Commerce announcement of the finalists nominated for the 2016 EPIC AWARDS:

The EPIC Awards celebrates those businesses and people who are doing great things in the business community by being Entrepreneurial, Progressive, Innovative and Collaborative.

Seven categories of awards recognize businesses and individuals supporting the community, demonstrating growth, finding ways to innovate, and are working with others as mentors and collaborators.

Anticipation builds for the annual EPIC Awards celebration as the field of nominees is narrowed—keeping finalists and attendees on the edge of their seats as the envelops are opened and award recipients are finally announced from the podium during an Oscar-styled reveal at this premier Chamber event.

Audu Real Estate is thankful to be recognized by our peers in the fields of business and industry as an innovator in the arenas of entrepreneurship and excellence in service. The company was one of three nominees within the Minority Business Category. Our goal and mission in service for the past 20+ years has been to build relationships through the process of serving the community through the practice of real estate.

Over the years we have had the privilege of helping hundreds of individuals and families locate spaces which they now call home. The best reward is the celebration we experience with our clients when they find a community they can embrace and which loves them back. It’s a sacred honor to be a small part of that process.

The housing market has stabilized in Grand Rapids, Michigan. Gone are the days when investor traffic flooded the market and houses were being plucked up at rock bottom prices. Although exceptionally low inventory throughout much of the past 18 months has been a challenge, home buyers are once again entering the market in a serious way. There is ample reason to indicate that a foray into the real estate market in Grand Rapids, Michigan today is a prudent financial move.

According to a recent article in Forbes Magazine, Grand Rapids Mi is now ranked as one of the nation’s Top 20 Housing Investments. The list was based on key indicators such as: employments opportunities, annual job growth, population and the calculation of an area’s Equilibrium Home Price or Income Price. This Equilibrium Home Price is used as a tool to measure what the average home price in any given area would be absent distortions such as the housing crash of recent years. A good score on this index provides investors with confidence that their investments are likely to garner a good return.

Another measure of the strength of the real estate investment sector in Grand Rapids, Michigan is the affordability index. According to statistics cited in the Forbes article, Grand Rapids, Michigan is currently under-priced by 23% when compared to similar areas across the country. One of the advantages the West Michigan area has had is the fact that the market was never seriously overheated. For the most part, appreciation rates were stable even during the wild upward swings that overtook many cities prior to the housing crash. Although Grand Rapids was affected significantly by the crisis, housing has regained its losses and home owners are seeing steady gains in their home equity.

Additional factors which bode well for Grand Rapids, Michigan in terms of real estate investment include a strong rental market. Vacancy rates in the Grand Rapids area are very low. The growth of area colleges (in particular Grand Valley) and the influx of population moving into the area for jobs has created the perfect storm as it collided with people who had lost their homes during the housing crisis competing for dwellings as well. Buyers in the Grand Rapids, Michigan area are finding that with low interest rates, it is often much cheaper to buy a house than it is to rent one.

Click on the picture below for the slide show featuring all the “Top Best Buy’ cities to invest in real estate within the United States. Contact Audu Real Estate by calling 616-791-0511 or e-mail: info@audurealestate.com for more information.

This summer, our market trends blog documented the issue of an unusually low inventory (less than 3 months supply) in the Grand Rapids MI real estate marketplace. According to the data report, (which tracked data available through the Grand Rapids Association of REALTORS up to May 2014) the amount of housing inventory available for sale in West Michigan had dropped to under 3 months of supply. (2.4 months to be exact based on Pending Sales)

Recently, the Grand Rapids Association of REALTORS released their September report. Inventory levels have relaxed a bit with levels of 3.6 months based on Pending sales. There has been a decline in the number of Pending Sales, BUT this has resulted in an INCREASE in the average sales price- almost 10% above the same period last year and 10% over last year’s sales prices.

These numbers are based on Pending sales activity but are tracking fairly closely with Closed transactions which are only slightly lower at 9.6%. Closed transactions pricing is slightly lower at $169,112 vs just over $172,000.

So, does this imply that the market is softening? The answer is a mixed Yes & No. An important statistic to note when looking at the numbers is how long homes are staying on the market before they are sold. In May, the average home was staying on the market for 52 days or more. In September, the number dropped to 47 days. So while, the price of the average home may have dropped by 2%, the amount of time to sell the average home has also dropped by approximately 10%!

So, it’s a little bit of a mixed bag. Prices have dropped slightly, BUT homes are selling more quickly. Inventory has risen since the summer from just under 3 months (2.8 months) in the summer to over 3 months (3.6 months). To sum things up: When homes are priced correctly and show well, the fall market can be very attractive because the competiton is less. You’re more likely to be dealing with fewer new listings and the excess inventory is often carry over from listings which did not sell during the summer.

The big news for the summer of 2014 according to statistics compiled and released by the Grand Rapids Association of REALTORS is Housing Inventory…or rather the lack of it as the community prepares to enter what is traditionally the most active segment of the selling season. According to the report, (which tracks data into May 2014) the amount of housing inventory available for sale in West Michigan has dropped to under 3 months of supply. (2.4 months to be exact based on Pending Sales) To give you perspective, a balanced market would have the housing supply at 6-7 months during this time of the year as many homeowners normally take advantage of the warmer weather and school closings to market their homes.

Trends Graphic for Housing Inventory in West MI 2013-2014

The issue of low inventory has dogged the market throughout most of 2014. New listings arriving on the West Michigan market have been about 12% lower than the pace of last year. (2014 – 6,592 new listings YTD vs 2013 – 7541 new listings). But in spite of the Inventory shortage, the Sales Volume for 2014 is on an upward trend! In fact, 2014 Sales Volumes for the real estate Board shows an increase of 4.1% for 2014 over last year and in May alone of this year, a 14.6 percent increase based on actual Closed Sales.

So what does this mean for the West Michigan Home Seller? Well, Average home prices have increased over 9% during the past month. Last year, the Average Home sold for $157,814 during the month of May. Today, the average price is $174,001. When ALL Sales including vacant land and multi-family units are added into the mix, the numbers drop a little, but irregardless, the average price of $167,728 is the highest price we’ve witnessed for almost a decade.

If you’re in the market for a home purchase, be prepared to aggressively pursue your goal. This is not a market for the faint-hearted when it comes to the prospect of bidding wars and making quick decisions. But, a quick decision does not mean you should make a rash decision when in comes to purchasing a home. Afterall, this is the biggest investment that most Americans will make. To be effective in a successful negotiation in this market, be prepared to do your research and know what’s for sale in the areas which interest you. As REALTORS, our company sets up client portals which provide instant notification when new listings which match the criteria for a home which might be a match shows up on the Multiple Listing Service. In addition, have all financing in order as a well qualified buyer wins hands down in this type of market.

If you’ve been considering placing your home on the market, your timing is impeccable! However, be forewarned that this market requires attention to detail in which market savvy buyers are not simply looking for a home, but for a well priced and well presented home. They’ll fight for that! On the flip side, homes which do not show well, continue to be penalized and sell for less even in a market as active as this one. If you’d like to know what you need to do to make sure your home attracts the best type of attention and price, give us a call for a free consultation at 616-791-0511.

A housing recovery is underway in West Michigan. Although many in the real estate community have had their eyes glued to the numbers to monitor the trends for almost a year, the mounting evidence is now clearly evidenced. In numbers released for January 2013, the Grand Rapids Association of REALTORS chronicles what many real estate professionals have experienced over the past year…there has been a significant shift for the better in the real estate market for West Michigan.

What do the Numbers say?

1. A 10% increase in average Home Sales price from 2011 to 2012 highlights the improvement. ($120,404 in 2011 vs. $132,676 in 2012)

2. Inventory levels are way down. 2011 averaged only 4 months supply of inventory the entire year. This was in stark contrast to 2008 when Inventory levels reached all time highs of 13.3 months of Supply.

3. New Listings are also down dramatically by almost 40%.

5. The average number of Current Listings dropped below 4,000 in 2012. A huge decline from the high of 10,924 in 2007 and the lowest number of listing in the system since 2003.

What should you do?

Well, if you’re comfortable in your home and have a terrific interest rate, it is good to know that things are getting better and you can worry a little less about your home continuing to experience a precipitous decline in value. If you haven’t refinanced, you might want to take a look at if this makes sense for you as interest rates are already starting to creep up a little.

If you have been wanting to move and didn’t think you could…assess again. Give us a call at 616-791-0511 to have a FREE detailed analysis e-mailed to you with a potential listing range. You might be pleasantly surprised to find out what your home value is today. What’s the difference between our report and Zillow or Trulia? Well, for starters, our data is gleaned from real estate professionals who are actually selling homes and closing transactions daily. We live and work in West Michigan and know the market. Our expert analysis is not just an algorithm of compiled data, but gives you the benefit of professional experience in our marketplace.

Don’t wait until everyone else figures out that NOW is a good time to sell. Get a jump on the market place and make the most of the improved housing market. Below is a graphic snapshot of the West Michigan market courtesy of data obtained from Grand Rapids Association of REALTORS MLS database.

A year ago today, my calendar indicates that there was a double showing on a brand new home listing. Not that unusual in itself. The home was a brick ranch in the north east side of the city. Having listed the property within the past two weeks, the activity on the home was notable given the time of the year and the fact that it was an older home in need of updating.

We were receiving several requests for home pre-view showings every day. And within a short period of time had multiple offers including a good cash offer. In less than a month, the home was sold and closed! This experience foreshadowed a shift which would become much more prominent in the real estate market in West Michigan during the 2012 calendar year.

Indeed, data obtained from the Grand Rapids Association of REALTORS revealed that home listings had plummeted dramatically from an average of over 8,000 homes for sale the previous year to just over 5,000 homes on the market at the end of 2011. By February 2012, the falling inventory levels were having a significant impact on overall home prices as demonstrated in a 15% increase in the average home price from just over $105,000 to approximately $125,000. This trend bode well for the remainder of the year.

In March, a notable first happened! The inventory/months of supply level dropped below 4 months. This was huge. To give perspective, in what would be considered a normal/healthy real estate market, a six month supply would be considered a balanced market. This would mean that neither Home Sellers or Home Buyers would be considered to have significant leverage in the market place. An increase in the supply side would give the potential home buyer an advantage while a decrease would be considered an advantage for the potential home seller. So, when the inventory level dropped BELOW 4 months and stayed that way for pretty much the remainder of the year, this translated into a significant advantage for the informed and reasonable home seller.

You will note my caveat…informed and reasonable. That being said, not every home Sold. We entered into a weird period of transition with regards to home value appraisals. As complaints from the real estate community reached crescendo levels due to the number of home sale transactions that were being flummoxed by low appraisals. What was going on?

Well, appraisals are a vital part of the real estate transaction, especially when financing is involved. A good appraisal protects the investment of the buyer and the lender in ensuring that the price paid for a home reflects the value of the home on the retail market. The problem was that as housing prices continued to escalate from an average of $105,000 in the beginning of the year to over $140,000 by mid year, there was little historical record to provide proof that this sudden increase was indeed an appropriate indicator of reasonable value.

So, while the market was being driven by low supply and low interest rates, there was downward pressure on the retail of homes due to low appraisal values because appraisers were finding it difficult to document a sales history that supported the current reality. Talk about interesting times! We had the bizarre scenario of homes with multiple bids being sold only to be undone because the buyer was told that he had over-paid for a home that he had just competed to purchase.

In time, all these kinks will work themselves out. But, that’s precisely why this blog post talks about ‘Shift’. Things are shifting, not just in the real estate industry but in our world as a whole. There has been a wholesale shift in the real estate market in West Michigan. Those who ventured into the market and put their homes for sale in good condition at the recommended sales price by and large moved on to their future. Distress sales of the Short Sale and Foreclosure variety declined as well.

Where are we now? Well, there has been some tempering in home prices. Which does give some credence to the caution exercised by the appraisal industry especially in light of the recent economic crisis. The average home price today in the West Michigan area is around $131,000, down from the highs during the summer. Inventory levels however have continued to remain below the 4 month range which represents a keen opportunity for home sellers with an eye on 2013.

If you’d like to have a more comprehensive analysis of the homes for sale in your neighborhood, please give us a call. 616-791-0511. Today, more than ever it is important to have a comprehensive perspective and strategy in executing a successful sale. When you’re ready to think about buying or selling a home, contact us for a conversation about options. We’re hear to make the process easier.

Oh…by the way, we’re getting a make-over! In the late Spring of 2013, we plan on launching our new website. We’re really excited about the re-design which will incorporate many of our marketing efforts into a more comprehensive package. Wishing you all the best in the New Year from Audu Real Estate.

Raw data from the Grand Rapids Association of REALTORS monthly market updates can be obtained here.

The demand for homes once again outpaced the amount of incoming inventory in West Michigan. Current housing inventory levels hover around a four months supply. Distress sales have also remained lower than in recent years. In fact, the numbers observed in distress sale activity are also a factor in the decreased inventory supply. These trends are serving to stabilize the housing market which had witnessed a tremendous free fall in recent years.

This is good news for the West Michigan real estate industry. While we are not out of the woods yet, the general trends seem to indicate movement in a positive direction. As we head into the fall months, there is more evidence that 2012 may be the year in which the market turned for good.